Customer segmentation is becoming recognized as a key tactic for increasing revenue by marketing more effectively to existing customers. This comprehensive paper discusses the business benefits of segmentation and describes in detail how to do it—what data to use, what tools you need, the steps in the process, and the criteria for choosing a good segmentation scheme. It shows you how to use customer segmentation, the common mistakes to avoid, and the obstacles you will face. The points are illustrated with several real world examples drawn from Loyalty Builders files. Marketers moving toward the customer-centric, personalized campaigns that customers are demanding will find this material practical and immediately useful.